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Morocco Witnesses Surge in Foreign Investment, Reaching Highest Levels in Half a Decade

Morocco Witnesses Surge in Foreign Investment, Reaching Highest Levels in Half a Decade
Monday 04 March 2024 - 10:11
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Contrary to earlier forecasts of a tough year for foreign direct investment, Morocco has encountered an unexpected upswing in inflows at the outset of 2024. According to data released by the Office d'Echange (OE), the net influx of foreign capital surged by a remarkable 25% year-on-year in January, reaching 2.5 billion Moroccan dirhams (MAD), equivalent to $249 million USD.

This achievement marks the highest monthly total recorded by the North African nation in the past five years, defying anticipations of stagnant foreign investment on a global scale. The reversal is particularly noteworthy following a 50% drop in foreign direct investment (FDI) to Morocco during the challenging economic conditions of 2023.

Insights from the United Nations Conference on Trade and Development (UNCTAD) illuminate the broader investment patterns affecting Morocco. A report released in February highlighted a 9% decrease in global FDI flows last year, amounting to $841 billion, as developing economies grappled with an expanding investment deficit. Even China, the world's second-largest economy, experienced an unusual 6% decline in foreign capital inflows.

Across Africa, FDI inflows remained largely stagnant at an estimated $48 billion, with financing for infrastructure projects plummeting by over 30%. UNCTAD attributed this slowdown to "economic uncertainty and higher interest rates" dampening deals on a global scale.

Looking forward, UNCTAD foresees only a modest increase in FDI recovery in 2024 due to ongoing geopolitical risks and elevated debt levels restraining investment deals. Nonetheless, January's surge in Morocco suggests that foreign investors may hold a more optimistic view of the market than global projections imply. If this upward trend persists, it could significantly bolster Morocco's economic prospects following a challenging period in recent years.

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